Cabot Corporation (NYSE: CBT) and Huntsman Corporation (NYSE:HUN) are both mid-cap basic materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, earnings, valuation, risk, profitability, analyst recommendations and dividends.

Dividends

Cabot Corporation pays an annual dividend of $1.26 per share and has a dividend yield of 2.4%. Huntsman Corporation pays an annual dividend of $0.50 per share and has a dividend yield of 1.8%. Cabot Corporation pays out 35.3% of its earnings in the form of a dividend. Huntsman Corporation pays out 28.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Huntsman Corporation has raised its dividend for 5 consecutive years.

Valuation & Earnings

This table compares Cabot Corporation and Huntsman Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cabot Corporation $2.61 billion 1.27 $488.00 million $3.57 14.93
Huntsman Corporation $9.84 billion 0.68 $1.18 billion $1.76 15.81

Huntsman Corporation has higher revenue and earnings than Cabot Corporation. Cabot Corporation is trading at a lower price-to-earnings ratio than Huntsman Corporation, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations and price targets for Cabot Corporation and Huntsman Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cabot Corporation 0 1 4 0 2.80
Huntsman Corporation 0 1 6 0 2.86

Cabot Corporation currently has a consensus target price of $60.60, suggesting a potential upside of 13.70%. Huntsman Corporation has a consensus target price of $29.14, suggesting a potential upside of 4.76%. Given Cabot Corporation’s higher probable upside, equities analysts clearly believe Cabot Corporation is more favorable than Huntsman Corporation.

Institutional & Insider Ownership

84.3% of Cabot Corporation shares are held by institutional investors. Comparatively, 75.9% of Huntsman Corporation shares are held by institutional investors. 2.5% of Cabot Corporation shares are held by insiders. Comparatively, 19.0% of Huntsman Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Cabot Corporation and Huntsman Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cabot Corporation 8.61% 16.03% 7.24%
Huntsman Corporation 4.33% 30.04% 5.34%

Volatility & Risk

Cabot Corporation has a beta of 1.09, indicating that its share price is 9% more volatile than the S&P 500. Comparatively, Huntsman Corporation has a beta of 2.79, indicating that its share price is 179% more volatile than the S&P 500.

Summary

Huntsman Corporation beats Cabot Corporation on 9 of the 17 factors compared between the two stocks.

Cabot Corporation Company Profile

Cabot Corporation is a global specialty chemicals and performance materials company. The Company operates through four business segments: reinforcement materials, performance chemicals, purification solutions and specialty fluids. Reinforcement materials’ rubber grade carbon blacks are used to enhance the physical properties of the systems and applications in which they are incorporated. Its rubber blacks products are used in tires and industrial products. Performance Chemicals consists of two businesses: specialty carbons and formulations business, and metal oxides business. Purification Solutions’ activated carbon products are used for the purification of water, air and pharmaceuticals, among others, as either a colorant or a decolorizing agent in the production of food and beverage applications. Its specialty fluids segment produces and markets cesium formate as a drilling and completion fluid for use in high pressure and high temperature oil and gas well construction.

Huntsman Corporation Company Profile

Huntsman Corporation is a manufacturer of differentiated organic chemical products and of inorganic chemical products. The Company operates all of its businesses through its subsidiary, Huntsman International LLC (Huntsman International). The Company operates through five segments: Polyurethanes, Performance Products, Advanced Materials, Textile Effects, and Pigments and Additives. Its Polyurethanes, Performance Products, Advanced Materials and Textile Effects segments produce differentiated organic chemical products and its Pigments and Additives segment produces inorganic chemical products. The Company’s products are used in a range of applications, including those in the adhesives, aerospace, automotive, construction products, personal care and hygiene, durable and non-durable consumer products, digital inks, electronics, medical, packaging, paints and coatings, power generation, refining, synthetic fiber, textile chemicals and dye industries.

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